2-hydroxy-4-methoxybenzophenone-5-sulfonic acid (Benzophenone-4; BP-4) is commercially used for sunscreen protecting the skin from damage by a majority of UV radiation from the sunlight. However, BP-4 has been found to induce cosmetic dermatitis of the face and neck and also causes sensitization at other locations. Layered host matrices comprising inorganic ions interchangeable with organic ions are particularly of interest because guest organic molecules can be readily stored by an exchange reaction, protected in the interlayer space from aging by heat, UV light, and oxygen. Furthermore, a direct contact of organic guests with skin can also be avoided in the interlayer space. In the present work, BP-4 was encapsulated by the exchange reaction with the calcined layered yttrium hydroxide (c-LYH) because its direct intercalation into the interlayer space of LYH was unsuccessful. When confined in the interlayer space, the confinement effect resulted in a significant broadening and a shift to the longer wavelength region of the absorption bands of BP-4. In contrast to a significant decrease in UV-screening ability of free BP-4, an effective UV absorption performance of BP-4-LYH hybrid was maintained even after exposed to the simulated sunlight for 72 h.